Prepaid debit cards are making a dent in the check cashing business. For years check cashing shops have served that part of the monetary market that didn’t have typical bank accounts. Pay checks, government checks and personal checks are all cashed for a charge that can range from 1.5% to 10% of the face worth of the check. Typically individuals paid these rates simply because there aren’t any typical banks positioned in their community.
Enter the prepaid debit card. Both Mastercard and Visa have prepaid debit programs which have significant advantages over the traditional check cashing shop. Probably the biggest advantage is not having to carry around cash. When you have just cashed your weekly or bi-weekly paycheck, what do you do with the money? Carry it on you? Hide it someplace at home?
With the prepaid debit card, your deposit is recorded and the card is the only thing it is advisable make purchases at a store, online, or get cash out of an ATM. Funding your card will be completed by direct deposit or by reloading the card at one of hundreds of stores that provide the service. There isn’t any want to hold round more money than you need. Because the debit card is utilizing your own cash and is not a credit card, there typically isn’t any credit check and most individuals are approved online immediately. Because there isn’t a credit check there is no inquiry recorded on your credit report.
While carrying a debit card is safer than carrying money, there is a downside when it comes to liability. Unlike a credit card which limits your liability for fraudulent use or broken or undelivered merchandise to $50, the debit card has stricter requirements. The card consumer should report the lack of his card or suspicion that the card has been compromised within 2 days of the occasion to limit his liability to $50. If the loss is reported after 2 days the liability jumps to $500. If the loss will not be reported for 60 days, then there isn’t a protection and your account could be wiped out. The big difference right here is in case you are disputing a fraudulent credit card cost, you aren’t out of money. In case you report a fraudulent use of your debit card, the bank may take 10 days to investigate which means you might be out that unauthorized use for over a week.
So how do these cards make cash for the issuers? In case you are thinking about using a debit card, make sure you caretotally read the terms and conditions and charge schedule. There are many programs available on the internet and they all have different payment schedules and features. Look for a card that does not charge you to reload in the event you use direct deposit. Look for a card that will allow you to see your balance on-line or by way of telephone without a charge. In the event you shop carefully, you’ll definitely get monetary savings compared to the check cashing shops.
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